Jakarta. Finance Minister Purbaya Yudhi Sadewa is pushing to take over microfinance firm Permodalan Nasional Madani (PNM) from sovereign wealth fund Danantara, aiming to cut costly interest subsidies and fast-track microcredit distribution to small businesses.

PNM, currently a unit of Bank Rakyat Indonesia (BRI) under Danantara, is being proposed as a dedicated channel for microloans (KUR), the government’s flagship microloan program.

“I am proposing to Danantara that PNM be handed over to us [the Finance Ministry]. We will turn PNM into a KUR distributor,” Purbaya said on Monday.

The Finance Ministry plans to place PNM under one of its state financing arms, such as Sarana Multi Infrastruktur (SMI) or Pusat Investasi Pemerintah (PIP).

The proposal comes as the government seeks to address inefficiencies in KUR distribution, particularly high-interest subsidy costs when loans are channeled through banks.

“For KUR distributed via banks, we pay interest of up to 18%. The funds are essentially spent on interest, reaching around Rp 40 trillion ($2.34 billion) annually,” he said.

Under the new scheme, the Rp 40 trillion allocation would instead be deployed as revolving capital rather than interest payments. Purbaya said the model could allow PNM to evolve into a dedicated MSME bank with capital of up to Rp 200 trillion within five years.

“Our budget will not increase. It remains Rp 40 trillion annually but it will be lent as revolving funds at low interest. So the Rp 40 trillion will not be lost,” he said.

Beyond financing, the government is also preparing an integrated MSME ecosystem covering mentorship, marketing, training, and credit guarantees. The proposal has been submitted to President Prabowo Subianto and has received initial backing, although discussions with Danantara are ongoing to finalize the structure.

“If supported by Commission XI, we will execute the plan. We have reported this to the President, and he said if it is good, just proceed. But we are still negotiating with Danantara. We ask for support from Commission XI,” Purbaya said.

He added that the takeover would only proceed if Danantara is unable to independently develop the MSME ecosystem.

“If it can be implemented by Danantara, then please proceed. But if not, we will take over PNM. If that happens, we will report back to Commission XI for approval,” he said.